Ibm Financial Analysis
Content Page
Part 1. Qualitative Analysis 3
1. Company Profile 3
2. Analysis of the Company’s Accounting Policies 10
Part 2: Quantitative Analysis of Financial Statements
17
1. Scope of the Analysis 17
2. Examining Credit Worthiness of IBM 17
2.1.1. Short Term Paying Ability 17
2.1.2. Long Term Solvency 22
3. Examining IBM Stock as a Investment Opportunity 23
Part 3: Conclusion 25 References 27 Appendix 1: Calculations for Financial Analysis 28
Part 1: Qualitative Analysis
1. Company Profile
International Business Machines Corporation (IBM), founded in 1911, is an American multinational technology and consulting corporation, with headquarters in Armonk, New York, United States. IBM manufactures and markets computer hardware and software, and offers infrastructure, hosting and consulting services in areas ranging from mainframe computers to nanotechnology.
In 2012, IBM was ranked the ninth most profitable and the nineteenth largest firm in terms of revenue. It employs approximately half a million employees worldwide. Globally, the company was ranked the 31st largest in terms of revenue by Forbes magazine in 2011 (Forbes, 2011). IBM has 12 research laboratories worldwide and, as of 2012 it has generated more than 47,000 patents effectively extending IBM’s leadership for the 19th year in terms of the most U.S. patents. IBM has over the years acquired 130 companies, in strategic areas of software and services (IBM, 2011, 6).
Famous inventions by IBM include the automated teller machine (ATM), the floppy disk, the hard disk drive, the magnetic stripe card, the relational database, the Universal Product Code (UPC), the financial swap, SABRE airline reservation system, DRAM, and Watson artificial intelligence.
a. The company’s principle line of business
The company’s major operations consist of three main business segments: i) Services, ii) Software, and iii) Hardware/Financing, which are further sub-divided
Part 1. Qualitative Analysis 3
1. Company Profile 3
2. Analysis of the Company’s Accounting Policies 10
Part 2: Quantitative Analysis of Financial Statements
17
1. Scope of the Analysis 17
2. Examining Credit Worthiness of IBM 17
2.1.1. Short Term Paying Ability 17
2.1.2. Long Term Solvency 22
3. Examining IBM Stock as a Investment Opportunity 23
Part 3: Conclusion 25 References 27 Appendix 1: Calculations for Financial Analysis 28
Part 1: Qualitative Analysis
1. Company Profile
International Business Machines Corporation (IBM), founded in 1911, is an American multinational technology and consulting corporation, with headquarters in Armonk, New York, United States. IBM manufactures and markets computer hardware and software, and offers infrastructure, hosting and consulting services in areas ranging from mainframe computers to nanotechnology.
In 2012, IBM was ranked the ninth most profitable and the nineteenth largest firm in terms of revenue. It employs approximately half a million employees worldwide. Globally, the company was ranked the 31st largest in terms of revenue by Forbes magazine in 2011 (Forbes, 2011). IBM has 12 research laboratories worldwide and, as of 2012 it has generated more than 47,000 patents effectively extending IBM’s leadership for the 19th year in terms of the most U.S. patents. IBM has over the years acquired 130 companies, in strategic areas of software and services (IBM, 2011, 6).
Famous inventions by IBM include the automated teller machine (ATM), the floppy disk, the hard disk drive, the magnetic stripe card, the relational database, the Universal Product Code (UPC), the financial swap, SABRE airline reservation system, DRAM, and Watson artificial intelligence.
a. The company’s principle line of business
The company’s major operations consist of three main business segments: i) Services, ii) Software, and iii) Hardware/Financing, which are further sub-divided
References: Forbes (2011) The World 's Biggest Public Companies. Available at http://www.forbes.com/global2000/ (Accessed Nov. 20th, 2012) Forbes (2011a) IBM and its Stranglehold on Patent Leadership. Available at http://www.forbes.com/sites/sap/2011/09/13/ibm-and-its-stranglehold-on-patent-leadership / (Accessed Nov. 22nd, 2012) IBM (2011) 2011 Annual Report. Available at http://www.ibm.com/investor/pdf/2011_ibm_annual.pdf (Accessed Nov. 21st, 2012) IBM (2012) Form 10-K Annual Report. For the year ended December 31, 2011 Available at http://www.ibm.com/annualreport/2011/bin/assets/2011_ibm_sec10k.pdf (Accessed Nov. 5th 2012) Porter, Michael (2008) The Five Competitive Forces that Shape Strategy. Harvard Business Review, January 2008. Thomson One (2012), Data Base, Company Analysis, Thomson Full Report. Available at http://tabseacct.swlearning.com/ (Accessed Nov. 5th 2012) Yahoo Finance (2012) IBM Profile. Available at http://finance.yahoo.com/q/pr?s=IBM (Accessed Nov 20th, 2012)